Index Trading with TradeDirect365
An index or indice is best defined as a portfolio of equities that represent the value of a particular market or sector of the market. Almost every country in the world has an exchange traded Index – a market (index) that reflects the underlying strength or weakness of the largest companies in that country. It is very much an indicator of a country’s economic health and well-being.
For example, the Australia 200 is Australia’s leading share market index and represents the largest 200 companies trading on the Australian Securities Exchange (ASX). If, on average and all other things being equal, the stock price of these companies goes up, then the Australia 200 Index will also rise as a result. If stock prices decline, the index will more than likely fall in value.
Trading index CFDs gives investors the opportunity to speculate on the price movement of an index without actually owning any of the stocks that make up the index. Traders can go both LONG (a buy trade) and SHORT (a sell trade) when using CFDs to trade indices – this is one of the biggest benefits of trading indices via a CFD trading platform. Find out more about the advantages of CFD trading versus traditional share trading here.